Massive Electricity tariff hike in Madhya Pradesh proposed at the instance of
the Asia Development Bank : Impending destruction

On the 11th of September 2002, the Madhya Pradesh government filed a tariff
increase petition before the Madhya Pradesh Electricity Regulatory Commission.
This action of tariff filing is in compliance with the conditions of a Rs. 720
crore loan agreement executed with the Asia Development Bank in November 2002
that required that a petition to increase tariffs should be filed by the MPSEB
before the disbursement of each instalment of the loan. The first instalment
of the loan was released after a tariff hike of 20% that was effected last
year.

The hike in electricity tariffs proposed for the various categories of
consumers in Madhya Pradesh in the current petition are massive,
incomprehensible, and seems to be designed to pulverize the entire economy of
Madhya Pradesh. The proposal envisages a 300% to 600% increase in the tariffs
for farmers, 50% increase for power loom producers, electricity tariffs up to
Rs. 4 per unit for all classes of electricity consumers including those below
the poverty line, and upto Rs. 5.75 per unit for shopkeepers and commercial
users. If this tariff hike is accepted by the Regulatory Commission, it is
clear that the farmers and workers of Madhya Pradesh will be pauperized,
traders will be wiped out, small and medium industries and power loom workers
will collapse and domestic consumers will not be able to withstand this tariff
shock, plunging thousands of homes into darkness.

Failure of reforms, consumers as victims

Even a cursory analysis of the second tariff petition filed by the state
government reveals that if the Madhya Pradesh State Electricity Board had only
complied with the orders given by the Regulatory Commission last year, and had
brought down the transmission and distribution losses from 51% to 42% ,
improved the efficiency of the plant to a modest 71%, as well as recovered
large debts over a Rs. 1000 crores, over 90% of which is with large industrial
consumers, they would have been able to raise Rs. 3000 crores of revenue and
there would be no need for this proposed tariff hike which seeks to raise an
additional revenue of Rs. 999 crores, at all.

As per the Clause 31 of the Madhya Pradesh Vidyut Sudhar Adhiniyam,2001(Madhya
Pradesh Power Reforms Act, 2001) the orders of the Madhya Pradesh Regulatory
Commission are final and binding on the Madhya Pradesh State Electricity
Board. Therefore it is amply clear that the non-compliance of the MPSEB in not
meeting its orders regarding debt recovery, plant efficiency and T&D losses is
in flagrant contempt of the Regulatory Commission. In fact, no less than the
Comptroller and Auditor General of India (CAG) has commented in its recent
report of 2001 that there have been losses totaling almost Rs. 70 crores in
the various stores belonging to the MPSEB. It is clear that the losses that
have resulted from this non-compliance cannot be thrust upon the consumer in
the shape of increased electricity tariffs.

The Jan Sangharsh Morcha demands

It is in this context that the Jan Sangharsh Morcha demands that the current
anti-people tariff petition filed before the Madhya Pradesh Regulatory
Commission should be immediately withdrawn and the MPSEB should be compelled
to comply with the previous orders of the MPSERC to improve its performance.
The Jan Sangharsh Morcha has also demanded that the loan agreement executed by
the Madhya Pradesh government with the Asia Development Bank through the aegis
of the Central government must immediately be scrapped. The so-called power
sector reforms must be stopped and real and positive changes in the power
sector must be effected after wide consultation with the common people of
Madhya Pradesh.

Strong protests against this tariff petition proposed by the Madhya Pradesh
government have already begun. On the 26th October, last month 15,000 people
gathered to oppose this tariff hike proposal under the aegis of the Malwa-
Nimad Kisan Mazdoor Sangathan at Mandleshwar. On the 26th of November itself,
hundreds of tribals from Dhar district demonstrated against these proposed
hikes. On the 27th of October, 5000 adivasis and peasants with the Adivasi
Mukti Sangathan demonstrated against this proposal. Farmers from the rural
area of Indore division alone filed 1304 objections in front of the Madhya
Pradesh Electricity Regulatory Commission. During the public hearing, on the
29th of October, 1500 farmers raised their voices against the proposal in
front of the Madhya Pradesh State Electricity Regulatory Commission. On the
31st of October, Jan Sangharsh Morcha held a meeting at Rewa, the headquarters
of the Rewa division, and on the 1st of November at Jabalpur , the center of
the Jabalpur division, and on the 6th of November at Bhopal. Consequently,
preparations are on to make informed interventions in the public hearings to
be held by the MPSERC at Rewa, Jabalpur and Bhopal in the coming week.

Intensifying the struggle, Invitation to the yatras

The Jan Sangharsh Morcha intends to intensify this struggle in the coming days
by organizing "Bijli Bachao - Azadi Bachao yatras" from the 15th to 30th
November 2002 all through Madhya Pradesh. These yatras will articulate the
popular protest against the electricity tariff hike proposed by the Madhya
Pradesh government as well as expose the designs of the Asia Development Bank
behind these the power sector reforms being brought into Madhya Pradesh by the
state and Central governments. These yatras will culminate with a massive
rally in Bhopal on the 30th of November. Please note that the Regulatory
Commission is slated to give its tariff order by the 30th of November.

This yatra will ensue from Indore and will travel through Dewas, Ujjain,
Ratlam, Dhar, Badwani, Khargone, Khandwa, Harda, Betul, and Hoshangabad to
reach Bhopal on the 30th of November. The other yatra will travel through
Balaghat, Dindori, Mandla, Seoni, Chindwada, Narsinghpur to reach Jabalpur.
Programs will also be held in the remaining districts of Madhya Pradesh.
Farmers, workers and the common people of Madhya Pradesh will demand the
withdrawal of anti-people petition through these yatras.

These reforms in the power sector in Madhya Pradesh that seek to corporatize
and privatize this hitherto state owned power sector and the MPSEB, and
transform electricity from a fundamental development right of people in a
welfare economy to a new business pasture for transnational corporations
seeking to maximize profits do not stand alone. Unbundling of the MPSEB into
five entities - one for generation, one for transmission and three for
distribution has already taken place. In Madhya Pradesh and all over India, it
is accompanied by similar measures for the privatization and globalisation in
every sector of the economy, large-scale resource alienation, enclosure of the
commons and an attempt to establish global corporate rule through the World
Trade Organisation and other allied forums.

It is clear enough that the two large political parties in this country are in
consensus with multilateral institutions such as the ADB and the World Bank
about the various anti- people reform agendas being foisted on the common
populace. Therefore it is farmers, workers, small tradespeople, self employed
people who will have to come together to forge broad based alliances to unmask
the designs behind these "reforms", and to wage popular struggles against
them.

We invite you to be part of this yatra/s and this struggle to challenge the
destruction of our livelihoods and the pulverization of our economy. Please
find enclosed the time-table of the yatra. We hope you will be able to spend a
few days with us during the yatra. We would also be deeply grateful if you can
make some financial contributions, and/or write about the issues involved, or
contribute in any other way in order to prevent the ADB and the Madhya Pradesh
government from effecting this destructive tariff hike.